THE  TREASURY

99

The  actual  advantage  which  the  Treasury  has  derived ­
  on  this  score  from  certificate  borrowing  has
been  considerably  less  than  the  maximum  theoretical
possibility.  This  has  been  in  consequence  of  what
might  be  described  as  the  policy  —  deliberately
adopted  or  insensibly  developed  —  of  a  mounting
Treasury  balance.
The  “  net  balance  ”  of  the  Treasury  may  be  regarded ­
  as  that  amount  which  a  conservative  financial ­
  policy  deems  it  necessary  to  keep  on  hand  ready
for  the  prompt  payment  of  public  charges  and
advances.  In  ordinary  times  the  balance  is  a  part
of  the  formal  budgetary  plan  —  not  exposed  to  extraordinary ­
  requisition,  and  subject  to  marked  increase ­
  or  reduction  only  to  the  extent  that  estimated
revenue  or  expenditure  vary.  It  is  likely  thus,  on
the  one  hand  to  be  more  stable;  but,  on  the  other
hand,  if  deranged,  to  be  less  easy  of  restoration  to
the  accustomed  level.
In  war  time  these  conditions  are  reversed.  Subject ­
  not  only  to  a  heavier  continuing  out-go t  but  to
more  frequent  and  more  irregular  demands,  the
working  balance  must  by  virtue  of  this  instability
be  larger.  Opposed  to  this  tendency,  is  the  facility
afforded  by  certificate  borrowing  for  quick  and  easy
replenishing  of  a  depleted  balance.  Under  such
conditions  the  Treasury  might  be  supposed  to  establish ­
  or  accumulate  a  larger  working  balance  at  the
outset,  but  thereafter  to  keep  it  within  such  bounds
or  at  most  to  subject  it  to  a  moderate  progression
with  increasing  public  expenditure.
The  actual  course  of  the  Treasury  balance  since
our  entry  into  the  war  has  been,  contrary  to  the  fore ­